CIT Group Files for Bankruptcy

Troubled CIT Group (CIT 0.42, -0.30) ended months of speculation over the weekend when its board approved a prepackaged bankruptcy plan.

CIT said approximately 90% of its debtholders approved the plan.  The company is asking the court for a quick confirmation of the prepackaged plan.

Under the plan, CIT expects to reduce total debt by approximately $10 billion, significantly reduce its liquidity needs over the next three years, enhance its capital ratios and accelerate its return to profitability.

None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, will be included in the filings. As a result, all operating entities are expected to continue normal operations during the pendency of the cases.

All common and preferred stock in CIT will be cancelled upon emergence from bankruptcy.